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8 United States District Court 9 Central District of California

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11 RCS UNLIMITED, LLC, Case № 2:24-cv-09892-ODW (JPRx)

12 Plaintiff,

ORDER GRANTING PLAINTIFF’S

13 v.

MOTION FOR DEFAULT

14 PANTHEON HEALTHCARE LTD. et al.,

JUDGMENT [25]

15 Defendants.

16 17 I. INTRODUCTION 18 Plaintiff RCS Unlimited, LLC moves for entry of default judgment against 19 Defendant Pantheon Healthcare LTD, on RCS’s Complaint for breach of contract and 20 breach of express warranty. (Mot. Default J. (“Motion” or “Mot.”), Dkt. No. 25.) For 21 the reasons that follow, the Court GRANTS RCS’s Motion. 22 II. BACKGROUND 23 In December 2022, RCS and Pantheon entered into an agreement, part written 24 and part oral, pursuant to which Pantheon agreed to supply RCS with 100,221 boxes of 25 premium, high demand, authentic Cranberry gloves. (Compl. ¶ 6, Dkt. No. 1.) 26 Pantheon warranted that the gloves would be inspected prior to delivery, confirmed as 27 authentic and authorized for resale in the United States, and fit for their intended 28 purpose. (Id. ¶ 7.) Pantheon agreed to deliver the gloves to RCS in Los Angeles, 1 delivery duty paid, for the purpose of storage, logistics, and sale in the United States. 2 (Id.) RCS agreed to advance $950,000 to Pantheon for the initial shipments of goods. 3 (Id.) Upon RCS’s receipt of conforming gloves, RCS would sell the gloves in the 4 United States and RCS and Pantheon would split the profits. (Id.) 5 On February 16, 2023, RCS paid Pantheon $500,000, and on March 9, 2023, 6 RCS paid Pantheon another $450,000. (Id. ¶ 9.) From January 25, 2023, through 7 April 17, 2023, RCS received 100,221 boxes of gloves. (Id. ¶ 10.) However, the 8 delivered gloves were non-conforming and could not be verified as authentic or as 9 authorized for resale in the United States. (Id.) Consequently, RCS could not resell the 10 gloves and had to warehouse them at an expense of $61,457.53. (Id. ¶ 12.) 11 Based on the above allegations, in November 2024, RCS filed this action against 12 Pantheon for breach of contract and breach of warranty. (Id. ¶¶ 15–25.) RCS’s counsel 13 served Pantheon, a United Kingdon entity, pursuant to the Hague Convention. (Decl. 14 Gary J. Gorham ISO Mot. (“Gorham Decl.”) ¶ 3, Dkt. No. 25; Proof Serv. (“POS”) 15 Compl., Dkt. No. 13.) Pantheon’s CEO, Ricky Smith, acknowledged that Pantheon had 16 been served and would not be retaining a lawyer, as Pantheon intended to represent 17 itself. (Gorham Decl. ¶¶ 4, 8.) On February 28, 2025, Smith sent a letter to the Court, 18 purportedly on Pantheon’s behalf, in answer to RCS’s complaint. (Id. ¶ 9; Order 19 Striking Letter, Dkt. No. 21.) However, entities may not appear pro se in federal courts, 20 nor may parties communicate with the Court via letter. (Order Striking Letter); 21 C.D. Cal. L.R. 83-2.4. Consequently, the Court struck Smith’s letter. (Order Striking 22 Letter.) 23 After six weeks without an appearance from Pantheon, the Court directed RCS 24 to request Pantheon’s default. (Mins., Dkt. No. 19.) Upon RCS’s request, the Court 25 found service valid and the Clerk entered the requested default. (Id.; Default, Dkt. 26 No. 20.) Pursuant to Federal Rule of Civil Procedure (“Rule”) 55(b), RCS now moves 27 for entry of default judgment against Pantheon. (See generally Mot.) 28 1 III. LEGAL STANDARD 2 Federal Rule of Civil Procedure (“Rule”) 55(b) authorizes a district court to grant 3 a default judgment after the Clerk enters default under Rule 55(a). However, before a 4 court can enter a default judgment against a defendant, the plaintiff must satisfy the 5 procedural requirements in Rule 54(c) and 55, and Central District Civil Local 6 Rules 55-1 and 55-2. Even if these procedural requirements are satisfied, “[a] 7 defendant’s default does not automatically entitle the plaintiff to a court-ordered 8 judgment.” PepsiCo, Inc., v. Cal. Sec. Cans, 238 F. Supp. 2d 1172, 1174 (C.D. Cal. 9 2002). Instead, “[t]he district court’s decision whether to enter a default judgment is a 10 discretionary one.” Aldabe v. Aldabe, 616 F.2d 1089, 1092 (9th Cir. 1980). 11 Generally, after the Clerk enters a default, the defendant’s liability is conclusively 12 established, and the well-pleaded factual allegations in the plaintiff’s complaint “will 13 be taken as true” except those pertaining to the amount of damages. TeleVideo Sys., 14 Inc. v. Heidenthal, 826 F.2d 915, 917–18 (9th Cir. 1987) (per curiam) (quoting Geddes 15 v. United Fin. Grp., 559 F.2d 557, 560 (9th Cir. 1977)). The court need not make 16 detailed findings of fact in the event of default, except as to damages. See Adriana Int’l 17 Corp. v. Thoeren, 913 F.2d 1406, 1414 (9th Cir. 1990). 18 IV. DISCUSSION1 19 RCS satisfies the procedural requirements for default judgment, establishes that 20 entry of default judgment against Pantheon is substantively appropriate, and supports 21 the requested relief. 22 A. PROCEDURAL REQUIREMENTS 23 Local Rule 55-1 requires that the movant establish: (1) when and against which 24 party default was entered; (2) the pleading to which default was entered; (3) whether 25 1 The Court is satisfied that it has subject matter jurisdiction over RCS’s claims pursuant to 28 U.S.C. 26 § 1332, as the parties are completely diverse and the amount in controversy exceeds $75,000. (Compl. ¶ 4; Suppl. Mot. 2–3, Dkt. No. 27.) Additionally, the Court is satisfied that it has specific personal 27 jurisdiction over Pantheon, as Pantheon purposefully availed itself of the privileges of doing business 28 in California by pursuing and contracting with RCS, and by supplying gloves to RCS in California for the purpose of RCS reselling them from California. (Compl. ¶ 5; Suppl. Mot. 3–6.) 1 the defaulting party is a minor or incompetent person; (4) that the Servicemembers Civil 2 Relief Act does not apply; and (5) that the defaulting party was properly served with 3 notice, if required under Rule 55(b)(2). In turn, Rule 55(b)(2) requires written notice 4 on the defaulting party if that party “has appeared personally or by a representative.” 5 RCS meets these requirements. On March 10, 2025, the Clerk entered default 6 against Pantheon as to RCS’s Complaint. (Default.) RCS’s counsel submits declaration 7 testimony that Pantheon is not an infant or incompetent person and that the 8 Servicemembers Civil Relief Act does not apply. (Gorham Decl. ¶ 12.) Finally, 9 although Pantheon has not formally or legally appeared in this case, RCS sent a copy 10 of the Motion to Pantheon via mail and email. (Cert. Service, Dkt. No. 25.) Thus, RCS 11 satisfies the procedural requirements for default judgment. 12 B. EITEL FACTORS 13 In considering whether entry of default judgment is warranted, courts consider 14 the “Eitel factors”: (1) the possibility of prejudice to plaintiff; (2) the merits of 15 plaintiff’s substantive claim; (3) the sufficiency of the complaint; (4) the sum of money 16 at stake; (5) the possibility of a material factual dispute; (6) whether the default was due 17 to excusable neglect, and (7) the strong policy favoring decisions on the merits. See 18 Eitel v. McCool, 782 F.2d 1470, 1471–72 (9th Cir. 1986). “Of all the Eitel factors, 19 courts often consider the second and third factors to be the most important.” Viet. 20 Reform Party v. Viet Tan-Viet. Reform Party, 416 F. Supp. 3d 948, 962 (N.D. Cal. 2019) 21 (internal quotation marks omitted). Thus, the Court considers these two factors first. 22 1. Second & Third Eitel Factors 23 The second and third Eitel factors require a plaintiff to “state a claim on which 24 the [plaintiff] may recover.” PepsiCo, 238 F. Supp. 2d at 1175 (alteration in original). 25 Although well-pleaded allegations are taken as true, “claims which are legally 26 insufficient[] are not established by default.” Cripps v. Life Ins. Co. of N. Am., 980 F.2d 27 1261, 1267 (9th Cir. 1992). RCS raises two causes of action, for breach of contract and 28 breach of warranty. 1 To prevail on a breach of contract claim, a plaintiff must prove: (1) the existence 2 of a contract; (2) plaintiff’s performance or excuse for nonperformance; (3) defendant’s 3 breach; and (4) resulting damages to the plaintiff. Aton Ctr., Inc. v. United Healthcare 4 Ins. Co., 93 Cal. App. 5th 1214, 1230 (2023); Landstar Ranger, Inc. v. Parth Enters., 5 Inc., 725 F. Supp. 2d 916, 920 (C.D. Cal. 2010). Here, RCS alleges that it entered an 6 agreement with Pantheon, in which Pantheon agreed to supply RCS with authentic 7 Cranberry gloves for resale in the United States and RCS agreed to pay Pantheon 8 $950,000. (Compl. ¶¶ 6–7, 16.) RCS alleges that, although RCS performed, Pantheon 9 breached the agreement by delivering non-conforming gloves. (Id. ¶¶ 9–10, 17–18.) 10 Finally, RCS alleges that Pantheon’s breach caused RCS damages in the amount of 11 $950,000 and the cost to warehouse the non-conforming gloves. (Id. ¶¶ 10, 12, 20.) 12 Thus, RCS’s Complaint, taken as true, adequately pleads a cause of action for breach of 13 contract. See Geddes, 559 F.2d at 560 (“[U]pon default[,] the factual allegations of the 14 complaint, except those relating to the amount of damages, will be taken as true.”). 15 To prevail on a breach of express warranty claim, a plaintiff must prove “(1) the 16 seller’s statements constitute an affirmation of fact or promise or a description of the 17 goods, (2) the statement was part of the basis of the bargain, and (3) the warranty was 18 breached.” Weinstat v. Dentsply Int’l, Inc., 180 Cal. App. 4th 1213, 1227 (2010) 19 (citation modified); Kellman v. Whole Foods Mkt., Inc., 313 F. Supp. 3d 1031, 1051–52 20 (N.D. Cal. 2018). Here, RCS alleges that Pantheon warranted it would deliver authentic 21 Cranberry gloves authorized for resale in the United States. (Compl. ¶¶ 6–8, 22.) RCS 22 also alleges that Pantheon’s promises and descriptions of the goods were material, 23 because non-authentic gloves that were not authorized for resale in the United States 24 would be worthless to RCS. (Id. ¶¶ 6–8, 10–11, 23–25.) Finally, RCS alleges that 25 Pantheon breached its warranties by delivering gloves that were not authentic and could 26 not be certified as authorized for resale in the United States. (Id. ¶¶ 10–11, 24.) 27 Accepting these allegations as true, RCS adequately alleges pleads a claim for breach 28 of express warranty. See Geddes, 559 F.2d at 560. 1 Therefore, as RCS adequately pleads causes of action for breach of contract and 2 breach of warranty on which it may recover, the second and third Eitel factors weigh in 3 favor of entering default judgment against Pantheon. 4 2. Remaining Eitel Factors 5 On balance, the remaining Eitel factors also weigh in favor of entering default 6 judgment against Pantheon. To begin, the first and fourth Eitel factors—possibility of 7 prejudice and sum of money at stake—favor default judgment. RCS would suffer 8 prejudice absent entry of default judgment because it would have no recourse against 9 Pantheon’s breaches of contract and warranty, and thus no remedy for the injuries 10 sustained from Pantheon’s misconduct. Further, as discussed below in the damages 11 analysis, the sum of money RCS seeks is directly proportional to the injuries sustained. 12 The fifth and sixth factors—possibility of dispute and excusable neglect—also 13 weigh in favor of default judgment. RCS’s allegations are accepted as true on default, 14 and Pantheon may not now “challenge the accuracy of the allegations in the complaint.” 15 Landstar Ranger, 725 F. Supp. 2d at 922. RCS supports its claims with ample evidence 16 and the Court’s review of the record reveals “no factual disputes . . . that preclude the 17 entry of default judgment.” Id. Further, in February 2025, Smith acknowledged service 18 of the Summons and Complaint on behalf of Pantheon. He advised RCS that Pantheon 19 would not be retaining counsel and would instead represent itself in this case. However, 20 after the Court informed Smith that entities may not proceed pro se in federal court, 21 (Order Striking Letter), Pantheon made no further attempt to appear or defend in the 22 intervening eight months. Accordingly, nothing in the record suggests Pantheon’s 23 failure to appear is a result of excusable neglect. 24 Finally, the seventh factor—policy favoring decisions on the merits—always 25 weighs in a defaulting defendant’s favor. However, because Pantheon’s failure to 26 appear in this action prevents the Court from reaching a decision on the merits, this 27 factor does not prevent the Court from entering judgment by default. See Duralar 28 Techs. LLC v. Plasma Coating Techs., Inc., 848 F. App’x 252, 255 (9th Cir. 2021) 1 (affirming entry of default judgment where all factors except the seventh weighed in the 2 plaintiff’s favor). 3 In sum, the Eitel factors weigh in favor of entering default judgment against 4 Pantheon on RCS’s claims for breach of contract and breach of warranty. 5 C. REQUESTED RELIEF 6 “A default judgment must not differ in kind from, or exceed in amount, what is 7 demanded in the pleadings.” Fed. R. Civ. P. 54(c). In the Motion, RCS seeks to recover 8 its actual out of pocket costs incurred from Pantheon’s breaches. (Mot. 1–2, 8.) This is 9 consistent with the relief RCS requests in the Complaint, and it is therefore permissible. 10 (Compl., Prayer for Relief (seeking actual and consequential damages, costs of suit, and 11 pre- and post-judgment interest).) 12 A plaintiff that establishes a cause of action for breach of contract may recover 13 damages that “are a natural result of [the] breach.” Lewis Jorge Constr. Mgmt., Inc. v. 14 Pomona Unified Sch. Dist., 34 Cal. 4th 960, 968 (2004). On a motion for default 15 judgment, a plaintiff seeking money damages must “prove-up” its damages with 16 admissible evidence. Amini Innovation Corp. v. KTY Int’l Mktg., 768 F. Supp. 2d 1049, 17 1053–54 (C.D. Cal. 2011). 18 RCS establishes that it paid Pantheon $950,000 and did not receive what it paid 19 for or anything that could be resold. (Compl. ¶¶ 13, 20; Decl. Ken Blakeman ISO Mot. 20 (“Blakeman Decl.”) ¶ 9, Ex. E (RCS bank statements reflecting payments to Pantheon), 21 Dkt. No. 25.) RCS also establishes that it incurred $61,394.982 in warehousing storage 22 costs before Pantheon retook possession of the non-conforming gloves. (Compl. ¶¶ 10, 23 12; Blakeman Decl. ¶ 14, Exs. F (storage invoices), L (RCS credit card statements 24 reflecting storage payments).) Therefore, RCS proves that it suffered $1,011,394.98 as 25 a result of Pantheon’s breaches of contract and express warranty. 26 27

28 2 Although RCS alleges warehouse expenses of $61,457.53 in the Complaint, (Compl. ¶ 12), RCS seeks and supports $61,394.98 in warehouse expenses in the Motion, (Mot. 8; Blakeman Decl. ¶ 14). 1 Vv. CONCLUSION 2 For the reasons discussed above, the Court GRANTS RCS’s Motion for Entry of 3 || Default Judgment against Pantheon for breach of contract and breach of express 4] warranty. (Dkt. No. 25.) The Court AWARDS RCS $1,011,394.98 in damages. 5 || Judgment will be entered consistent with this order. 6 7 IT IS SO ORDERED. 8 9 November 25, 2025 \

OTIS D. HT, Il 3 UNITED STATES DISTRICT JUDGE

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